The Pound is moving southwards, extending losses for a second straight session versus the Euro. The Pound Euro exchange rate settled in the previous session -0.35% at €1.1433 following more dire UK and eurozone data and as Germany moved forward with opening its economy.
At 06:30 UTC, GBP/EUR is trading -0.15% lower at €1.1411 as investors look ahead to the Bank of England’s monetary policy decision.
Projections In Focus
The Pound is trading lower despite news the government will drop the stay at home message this weekend when Boris Johnson sets out the UK’s lockdown exit strategy.
The central focus for pound investors today will be the Bank of England monetary policy announcement. Over the past two months, the central bank has cut interest rates to the lowest level in 300 years, unleashed an additional £200 billion of quantitative easing, and put into place measures to ensure lending continues.
Given all the BoE action, today’s meeting is expected to be a much quieter affair where the bank takes stock of where it is. Instead, the BoE’s new forecasts will the main attraction. These will be the most thorough assessment yet of how the 6 weeks of lock down have affected the UK economy. The figures will undoubtedly show the UK economy sinking into a very deep recession.
These forecasts could also provide clues as to what kind of recovery the BoE expects and when the central bank could loosen monetary policy further.
It is worth noting that the decision will be at 4 hours earlier than usual, a move which has also caught investor’s attention,
German Industrial Production In Focus
The Euro advanced in the previous session despite some truly horrendous data. Data showed that the service sectors across the region ground to a halt, most noticeably in Italy and Spain amid a very strict lockdown. Eurozone retails sales also showed a record decline.
Yet despite the data, the Euro pushed higher boosted by optimism surrounding the easing of lockdown measures. Germany in particular is advancing with its reopening strategy and is showing no signs of a second wave of infections, yet.
Investors will continue to monitor covid-19 statistics and look towards the release of German Industrial production data, which is expected to dive -7.5% month on month in March.
